Franklin India Taxshield, Dividend Payout option.
Why Franklin India Taxshield?
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Because of the long term track record it has established so far. Salient notes about the fund are at:
http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=601 .
Why Dividend Payout option?
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As the lock in period for tax saving funds is 3 years, even if an investor has a decent capital appreciation over the 3 years of investment (due to a bull run in the equity markets), just on the verge of redemption week/month/quarter there's always a market risk (unless the investor is really willing to let the money parked in the Tax Saving Scheme even after the 3-year mandatory lockin).
A Dividend Payout option might be able to get some of the investor's money back (in the worst case) in the form of dividend. In a way, that's potentially acting as an inherent 'profit booking' mechanism in the interest of the investor!
